1. Field of the Invention
The present invention relates generally to financial services, and more particularly to systems and methods for transferring money between individuals in different countries.
2. Description of the Prior Art
Sharing of money among relatives, friends, or business partners has always existed in human society. The methods used for money sharing are affected by both the versatility of the forms of money, the mobility of people, and the manifestations of the need to share. Financial transactions have become increasingly credit-based. These changes have spawned a vast network of credit card companies and banking systems. Unfortunately, global traveling, habitation, and migration of people often put customers in situations where existing credit and banking systems do not offer satisfactory money sharing opportunities in terms of convenience, compatibility and directness.
As the sharing of money has evolved beyond direct mailing of currencies, people have started to use financial institutions such as banks, credit unions, or brokerage houses as “middlemen” to transfer money from one location to another and from one individual to another. In one example, wire transfer is used through an independent brokerage house having branch offices at various locations to transfer money from one location to another. One problem with wire transfer is that it requires both transferor and transferee to have easy access to a branch office of the brokerage house.
Another problem with using such brokerage houses is the amount of time required of the transferor. The transferor must travel to the brokerage house, fill out a form, and then wait in a line for an agent. Additionally, such brokerage houses must charge hefty service fees to cover the overhead of the building and the employees.
Bank cards such as debit cards associated with a traditional bank account could also be used to transfer money from a transferor to a transferee. In one example, a transferor having a traditional bank account may receive two debit cards and give one of the debit cards to a transferee. The transferee may then use the debit card to withdraw money from the transferor's bank account. If the transferor does not want the transferee to have access to the main bank account, the transferor may establish a separate debit account with a debit limit particularly for the purpose of transferring money to the transferee. If enabled to access Automatic Teller Machines (ATMs), debit cards shared in this manner could be used to transfer money to a transferee located in many places in the world.
One problem with debit cards, ATM-enabled or not, is that they require a traditional bank account, such as a demand deposit account (DDA). A bank customer must physically go to a branch of a traditional bank to set up a bank account before he can start to use the ATM-enabled debit cards associated with the bank account. The bank typically checks the customer's identity based on their driver's license or other documentation and collects personal information such as address, date of birth, and Social Security number. Banks need to verify identification to prevent fraud and/or improve security for the customer's banking transactions. In addition, most banks require credit checks and US citizenship, without which banks require large deposits. This results in excluding as much as one third of the people desiring the services. Furthermore, there may be government regulations that require proof of identity before using bank accounts to prevent illegal activities such as money laundering and funding of terrorist activities.
Additionally, funds associated with a debit account and debit cards may not be immediately available for withdrawal. For example, a customer having an existing bank account and associated ATM-enabled debit cards may make direct deposits at an ATM without physically visiting a bank branch. The deposits are often made in cash or a check in a deposit envelope. The deposited amount is not immediately available until a bank employee services the ATM machine to collect and process the deposits. This “float period” typically can be 1-3 days long.
Using credit cards could accomplish similar results for money transfer, but with similar problems. A credit card holder usually needs to have a good credit history to possess a credit line issued for a credit card. In addition, credit cards can take weeks to issue from a bank. Typically, a customer must submit an application for a credit card. The application is subject to approval. If approved, the credit card is then mailed to the person's address. The process often takes days, if not weeks. In addition to the delays, many people may wish to avoid using credit cards to transfer money due to lack of security, privacy, or credit history.
More importantly, money transfer is different from money sharing among two or more people. Money transfer involves a one-way transfer of money in which money is transferred from a transferor to a transferee. Most money transfer methods are also one-time transfers. The transferee usually receives the transferred money in one withdrawal to complete the one-way transfer. If the transferor needs to transfer more money to the transferee on a subsequent occasion, a separate and unrelated money transfer is performed. Even if an account is set up for multiple money transfer transactions, the account does not provide a way for the transferee to give money back to the transferor.
Stored-value cards typically have been used to provide payment for goods or services after a user has deposited money into a stored-value account. For example, stored-value cards have been used as gift cards and as cards that provide payment for coffee or copies. Stored-value cards have both their origin and history related to merchants who sell goods or services. The stored-value cards are used for direct purchasing of the goods or services by the customers from the merchant.